Insurer-backed PIP bill supported by consumer reps

The insurance pays medical bills for policyholders injured in auto accidents regardless of which driver is at fault. It's intended to protect Floridians that don't have health insurance and to avoid lawsuits and the costs associated with them for minor injuries.

But a coaltion of state leaders, insurers and consumer advocates say some crooks are cashing in on the insurance by staging accidents or exaggerating injuries to inflate claims.

A spokeswoman for the Sunshine Alliance to Erase Fraud, a coalition of insurers, consumer advocates and others, said Thursday that the group is providing input for a bill that Sen. Ellyn Bogdanoff, R- Fort Lauderdale, and Rep. Jim Boyd, R-Bradenton, are expected to file next week.

The state's Division of Insurance Fraud has made about 50 arrests related to PIP fraud this year. That pushes up premiums each year by about $100 on average for families with two cars, according to Insurance Information Institute, an industry group.

The alliance calls that a "fraud tax." The group includes AARP, a senior advocacy group, the Florida Consumer Action Network, the Florida Public Interest Research Group, the Insurance Consumer Advocate, Chief Financial Officer Jeff Atwater, Allstate, Nationwide Insurance, Geico and Travelers Insurance.

"Honest Florida drivers are being taken for a ride by greedy staged-crash gangs," Walter Dartland, co-chair of the coalition and executive director of the Consumer Federation of the Southeast, said in a statement. "Urgently needed anti-fraud reforms will turn up the heat on swindlers, make the streets safer and help ease the pressure on honest drivers' auto premiums."

It's unclear whether legislators will require companies to pass the savings to consumers and if provisions opposed by consumer advocates will stay out of the legislation, which can be changed as it's passed by committees.

Opponents say some of the provisions the alliance agrees to so far could create problems for policyholders. For instance, a draft of the coalition's proposal allows insurers to require policyholders that want coverage or benefits from the insurance to have mental and physical exams done and it allows insurers to deny an entire claim, even when only a portion of the claim is "misleading."

Sen. Rene Garcia, R-Hialeah, said the insurance industry should release Florida-specific data on how many personal injury protection claims are made each year and the percentage that are determined fraudulent. "We can't set informed public policy without the complete picture," he wrote in recent a commentary in the Sun Sentinel. "There will always be those few unscrupulous individuals willing to stage accidents or file false claims. As citizens and taxpayers, we should be outraged by these egregious acts. However, we shouldn't let these instances color our perception of the whole system."

The only bill filed so far, HB 967, has provisions that consumer advocates oppose such as limits on attorneys fees. They say that creates an unfair advantage for insurers that have more resources to fight policyholders on claims. They're also opposed to a part of the bill giving discounts to policyholders that agree to use health care providers picked by insurers because those doctors may not support policyholders in court.